The differing impact of COVID-19 across Republican and Democratic states

Decision-making by governments during the COVID-19 health crisis pertains a delicate balance between physical and financial health of individuals. We compare the health and economic outcomes resulting from the respective responses adopted by Republican and Democratic states in the US. Our results show that the more restrictive measures adopted by Democratic states resulted in more severe economic shocks as proxied by lower levels of employment, lower levels of individuals\u27 earnings and an inferior performance in regional banking activity compared to Republican states. Although the number of infections is higher in Republican states, we find that the level of hospitalizations and mortality are not significantly different across Republican and Democratic states